SCDigest: Is "Lean Six Sigma" the Winning Approach to Manufacturing and Supply Chain Improvement?
Through a special arrangement, what follows is an excerpt of a current article from Supply Chain Digest, presented here for discussion.
Traditionally, many companies have adopted "Lean" and "Six Sigma" as their primary approach to operational improvement in their supply chains, or in some cases used both but as fairly independent tools. Increasingly, however, companies are seeing the benefit of combining the two techniques into a more integrated strategy that uses the best of each approach, which can be highly complementary. Many believe this "Lean Six Sigma" strategy is the best way to improve overall supply chain results and tackle process improvement more holistically.
Lean has traditionally been associated with the elimination of waste in business processes. Originally focused on improvement on the factory floor, it has since been used in some cases to power broader supply chain improvements. European retailer Tesco, for example, used Lean principles to engineer improved store replenishment processes.
Six Sigma is a quality improvement methodology that in general seeks to reduce process and results variation. Originally focused on improving the quality of manufactured components, the approach has also been expanded for use in improving almost any business process. Drug wholesale McKesson, for example, has used Six Sigma to improve a variety of supply chain processes, such as inbound trailer cycle times and pick face replenishment efficiency.
There are several principles that drive the strategy of bringing Lean and Six Sigma together:
- Lean cannot bring a process under statistical control.
- Six Sigma alone cannot dramatically improve process speed or reduce invested capital.
- Both enable the reduction of the cost of complexity, but in complementary ways.
The two methodologies can interact and reinforce one another, and there is much evidence that total improvements in a process is larger if Lean and Six Sigma are implemented together.
"The opportunity is to reduce the variability in value-adding processes," said SCDigest editor Dan Gilmore. "Lean should eliminate the non-value added process steps, and then Six Sigma can be applied to tighten up the execution of those processes."
So, from a Lean perspective, what Six Sigma adds is the ability to reduce process variability. From a Six Sigma perspective, what Lean adds is often greater process and cycle time velocity, as well as lower operating costs. It can also be said that Lean focuses on reducing Time variability, while Six Sigma focuses on reducing Process variability. Lean tends to generate more "Quick Fix" solutions, while Six Sigma takes a more "Root Cause" approach.
Companies that have focused on either Lean or Six Sigma as a primary strategy to the exclusion of the other, or that use both but as very separate tools, should consider whether there is opportunity to deliver better results from a Lean Six Sigma strategy.
Discussion Questions: Do you think combining Lean and Six Sigma is usually the best total approach or are they better used separately to solve different problems?